Budget deal? Big obstacles, New Year's deadline

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Washington • With hopes of a "grand bargain" long gone, congressional negotiators now are seeking a more modest deal before year-end to ease the automatic spending cuts that are squeezing both the Pentagon and domestic federal programs. But the going is getting rougher.

House Democratic leader Nancy Pelosi said Thursday she would withhold support from any compromise to ease across-the-board cuts until Republicans also agree to renew expiring unemployment benefits for America's long-term jobless, adding a major complication.

At the same time, conservatives are balking at a proposal to raise fees on airline tickets to pay for TSA agents as part of an agreement, another hurdle.

GOP leaders, meanwhile, are preparing a backup plan for averting another government shutdown in January if there's no budget deal by then.

Negotiators on Capitol Hill are trying hard to close out a deal but are facing resistance from Pelosi and other Democrats determined to add $25 billion to extend federally-paid jobless benefits. Those benefits average $269 a week to people whose 26 weeks of state-paid unemployment benefits have run out.

"We cannot, cannot support a budget agreement that does not include unemployment insurance in the budget or as a sidebar in order to move it all along," Pelosi said Thursday at a hearing to publicize the plight of people set to lose the jobless benefits.

Her statement was significant because she is going to have to supply Democratic votes if any deal is going to pass the Republican-majority House. Many conservatives are likely to abandon a compromise agreement over fee proposals such as increasing Transportation Security Administration charges that could add $5 to the cost of a typical round-trip airline ticket.

"If it looks like a duck, quacks like a duck and walks like a duck, it's a duck," said Rep. Mo Brooks, R-Ala. "This is a tax increase, nothing more."

The budget talks are just one item in a packed year-end agenda for Congress. House Speaker John Boehner insists the House will exit Washington by next Friday, leaving little time to pass a budget bill, a defense policy measure and renewal of food stamps and farm programs.

With the massive defense policy bill stalled in the Senate, leaders of the House and Senate Armed Services committees have been working on a backup plan to move quickly on a pared-back version in which all disputes have been resolved in advance.

The House hopes to vote next week on the new, pre-cooked defense bill and then send it to the Senate, which would clear it and send it to President Barack Obama, extending lawmakers streak of passage of an authorization bill to 52 years, according to House and Senate congressional aides.

The bill would include some of the more controversial elements on new rules to stem sexual assaults in the military and provisions on handling terrorist suspects at Guantanamo Bay, Cuba. The fallback plan, however, is contingent on Senate Democrats and Republicans abandoning their push for amendments on new sanctions on Iran, National Security Agency spying, Afghanistan and other issues.

Separately, negotiators reported progress on the farm and food stamps bill, but Boehner said Thursday that a temporary extension through the end of January may be required to give negotiators more time to complete their work.

As for the overall budget, talk of a "grand bargain" to stabilize the government's spiraling debt is no longer heard. Taxes and cuts to Medicare benefits are off the table. House and Senate negotiators are trying to seal a small-bore budget pact that would take the roughest edges off of automatic spending cuts that threaten a second wave of furloughs of federal workers and damage to military readiness.

Exact details are tightly held, and days of negotiations likely remain. But House Budget Committee Chairman Paul Ryan, R-Wis., and Senate Budget Committee Chairman Patty Murray, D-Wash., are focusing on a potential pact that leaves politically toxic proposals like taxes off the table and instead focuses on less controversial proposals left over from prior budget rounds.

Aides following the talks say any agreement is likely to include the increased airline ticket fee, a proposal to require both military and civilian federal workers to contribute more to their pensions, and higher premiums on companies whose pension plans are insured by the government. Hospitals that treat a "disproportionate share" of people without medical insurance could see their Medicaid payments trimmed and the government may be able to squeeze a few billion dollars from leases of government-controlled electromagnetic spectrum.

The idea is to lift the painfully low "cap" on the day-to-day operating budgets of federal agencies for the 2014 budget year by $35-$45 billion or so and ease cuts for the 2015 budget year as well. The cap for 2014 was supposed to be $1.058 trillion but was automatically cut by $91 billion because of the failure of Congress to reach a follow-up deficit-cutting agreement to the hard-fought 2011 Budget Control Act.

Spokesman for Murray and Ryan are cautiously hopeful that a pact can be sealed.

"Conversations continue and a number of open items remain, but Chairman Murray is hopeful that they can continue making progress and can reach a bipartisan deal," said Murray spokesman Eli Zupnick. "They are making progress," said Ryan spokesman William Allison.

But other sectors of the Capitol are less optimistic. Top House Democrats like Steny Hoyer and Chris Van Hollen of Maryland are upset about requiring higher pension contributions for the many federal workers living in their districts. Top Senate Republican Mitch McConnell of Kentucky has staked out a position in support of the $967 billion cap required by the 2011 budget pact. And the amount of relief coming the Pentagon's way might not even restore the military's budget to 2013 levels, which is hardly generating excitement among defense hawks.

If the talks fall apart, House Speaker John Boehner says he'll advance a short-term spending bill known as a continuing resolution before the current stopgap spending bill expires on Jan. 15, but there's real anxiety among Republicans as to whether such a measure could pass without additional money to attract Democrats and GOP defense hawks.

Also Thursday, Boehner held the door open for possibly extending the emergency unemployment benefits program.

"If the president has a plan for extending unemployment benefits I'd truly entertain taking a look at it," he said.

"It doesn't have to be in the same legislative bill as a budget agreement, but we want to see a commitment and a way that we're going to get (jobless aid) done by the end of this year," said Rep. Van Hollen of Maryland, Pelosi's top representative in the budget talks.

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